1. Corporate Social Responsibility

2. What is Corporate Social Responsibility?
Looks at ethical issues on the organization level.
Obligates organizations to act in ways that serve both its own interests and the interests of external stakeholders.

3. Corporate Social Responsibility
Definition: The obligation of an organization to act in ways that serve the various interests of stakeholders.
Organizational Stakeholders
Those who are directly affected by the behaviour of the organization and hold a stake in its performance
E.g. employees, shareholders (people who own stock in the company), customers, suppliers, etc.

4. Figure 3.4 Multiple stakeholders in the environment of an organization.
Management Fundamentals - Chapter 3

5. Leadership Beliefs Guiding CSR
People – do best in a healthy work environment
Communities – organizations perform best in healthy communities
Natural Environment – treat with respect
Long Term Success
Reputation – protect to ensure customer and stakeholder success

6. Perspectives on Social Responsibility
Classical view
Management’s only responsibility is to maximize profits.
Socioeconomic view
Management must be concerned for the broader social welfare, not just profits.

7. Arguments For Social Responsibility
Adds long-run profits
Better public image
Avoids more government regulation
Businesses have resources and ethical obligation
Better environment
Public wants it

8. Arguments Against Social Responsibility
Reduced business profits
Higher business costs
Dilution of business purpose
Too much social power for business
Lack of public accountability

9. Criteria for Evaluation
Is the organization’s …
Economic responsibility met?
Legal responsibility met?
Ethical responsibility met?
Discretionary responsibility met?

10. Figure 3.5 Criteria for evaluating corporate social performance.
Obstructionist Defensive Accommodative Proactive

11. Strategies for Pursuing Social Responsibility
Obstructionist: meets economic responsibilities.
Defensive: meets economic and legal responsibilities.
Accommodative: meets economic, legal, and ethical responsibilities.
Proactive: meets economic, legal, ethical, and discretionary responsibilities.

12. Figure 3.6 Four strategies of corporate social responsibility—from obstructionist to proactive behavior.

13. Government Influence on Organizations
Common areas of government regulation of business affairs:
Occupational safety and health
Fair labor practices
Consumer protection
Environmental protection

14. How Organizations’ Influence Government
Personal contacts and networks
Public relations campaigns
Lobbying
Political action committees
Illegal acts, such as bribery or illegal financial contributions

15. CSR Exercise
The Polluters Dilemma